Daily Brief Singapore: Thai Beverage, Sabana Industrial REIT, Sheng Siong and more

In today’s briefing:

Charoen Rearranges ThaiBev and TCC’s Deckchairs

Back on the 18th, the Sirivadhanabhakdi family-backed Thai Beverage (THBEV SP) announced it would swap its 28.78% stake in Frasers Property Ltd (FPL SP) with THBEV-affiliate TCC Assets.
Under the agreement, TCC will transfer a 41.3% stake in food and beverage play Fraser And Neave (FNN SP) to THBEV, lifting THBEV’s holding to 69.61% from 28.31% currently.
The share swap triggers no Offers for either F&N or FPL. THBEV says it has no plans to privatise F&N … at the moment.

With almost full certainty that the Federal Reserve will cut interest rates this September (based on CME Fed Watch Tool showing a 100 per cent probability as of Jul 26, 2024), interest rates continue to remain in the spotlight for REITs.
The Monetary Authority of Singapore (MAS) announced last week a proposal to simplify the leverage requirements for all Singapore REITs (S-REITs) – it proposes for a single aggregate leverage limit of 50 per cent and a minimum interest coverage ratio (ICR) of 5 times to be applied for all S-REITs.
Five S-REITs that maintain the lowest gearing ratios are Sasseur REIT (25.2 per cent), Paragon REIT (29.9 per cent), Far East Hospitality Trust (31.5 per cent), AIMS APAC REIT (32.6 per cent), and Frasers Logistics & Commercial Trust (32.7 per cent).

Sheng Siong (SSG SP) reported steady revenues/profits in Q2 2024, up 1.2%/4.7% YoY. In H1 2024, revenues/profits were up 3.4%/6.8% YoY due to same-store sales growth of 6.4%.
The company expanded its footprint by two stores to 71 in H1 FY24 in Singapore. Two additional stores will open in July 2024, followed by ten tender results in H2.
The stock trades at a 16.3x PE, has a 4.3% dividend yield, and holds 16% of the market cap in net cash. Opportunities for higher growth are on the horizon.

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